The state of California has the biggest economy of any of the other American states. The state’s Franchise Tax Board administrates California’s taxation, passing out as well as enforcing the laws with regards to income tax, property tax and sales tax, among others. California’s tax laws have numerous forms and they cover a wide array of economic activities.
One of the state’s primary tax revenue sources is sales tax and the states standard sales tax rate is at 8.25%, with items like prescription medicine and groceries being exempted from taxation. The state’s tax laws also place special taxes on both cigarettes (with a surcharge of 87 cents) as well as gasoline (46.6 cents for every gallon). As a California resident, you need to declare the purchases you’ve made over the Web and then submit the right local tax for them.
As for property tax, as a resident of the state, all of your real estate properties need to be assessed for them to be taxed at 100% of their respective tax values. Tax rate differs depending on the property’s value. However, it can’t go beyond 1% of that value within a tax year.
Historically, the state of California has exempted specific residents, like the disabled and the elderly, from paying some or even all their property taxes. However, numerous exemptions have been stopped because of California’s financial crises of 2009.
Finally, each resident or worker of the state needs to pay income tax. If you’ve lived in the state for just a part of the year, you could indicate your residence status on your tax form and then pay a pro-rated part of the right amount of income tax.
The state’s lowest income tax bracket is at $7,168, where you pay your tax at a 1.25% rate. However, if you’re earning above a million dollars per year then you’ll pay 10.55% income tax. Between these two, there are six income space brackets.
If you have dependents, you may claim a $98 tax credit for every one of them. The state of California provides supplementary credits if you’re single, married or a senior above the age of 65.